Perfect explanation of Asset Allocation
Just before reading Richard Ferri's "All About Asset Allocation" I had read William Bernstein's two books on the same topic, "The Intelligent Asset Allocator", and "The Four Pillars of Investing" (both really excellent). Compared to the broad reaching Bernstein books, which bring in a lot of examples from stock market history in explaining Asset Allocation, the Ferri book is a straight up text book, clear, spare but complete, and really well done. It really helped to hone my understanding of the topic. After reading it I also purchased his book on Index Funds.

wasn't impressed
All these long term returns people give in regards to stocks, bonds, gold and such do not involve active management but instead take a buy and hold strategy. So why follow a theory of regression to the mean the author suggest on page 36 in asset allocation. Why increase your expenses every year by selling some of your top performing sectors and use that money to buy into the poor performing sectors. This strategy seems like market timing set on automatic and we all know that it's very hard to time the market consistently. Index funds that beat most funds don't market time. They work by being fully invested in the asset class, they have a long term buy and hold view, and they keep expenses and taxes low. You can get basic asset allocation info for free from Vanguard's website which also offers target date retirement funds for those who want to use asset allocation the simple way.

Great book
This book does a fine job of explaining asset allocation and the fundamental concepts that build a diversified porfolio. Asset allocation is explained very well in relation to portfolio diversification and how rebalancing is essentially the way to increase gains. It explains very well that asset allocation is all about risk management and there is no one size fits all though we can still markup broad categories of similar investor behavior. Market timing is about making a killing by buying in low and selling high however it involves uncertainty given everyone shares similar market information. Rebalancing is market timing without having to chase the market, its buying low and selling high passively though.

All in all, great read and beneficial for all. Lot of practical advice. Its good it came out after the early 2000 tech-stock bubble bursts so it presents the grim reality of investing when your financial plan does not manage its risk and assets.

Learn all about allocating your eggs...the right way.
Picked up another great book by Richard Ferri and this one's well worth the investment.

Taking asset allocation to the next level
Discover how to make your portfolio hit the sweet spot. This book takes your investing to the next level --- the winning level.

I got a lot of valuable information from this book. For one thing, it deals with the allocation of the fixed income portion of the portfolio --- something no other book that I'm aware of has done. And this is important.

There's really nothing that this book doesn't cover when it comes to asset allocation. It certainly helped me to get my own portfolio back in shape.

It talks about your real tolerance for risk --- not those that you get from tests. It says that most of us have less tolerance than we admit. I think that's true. We talk like we can handle a lot of risk when in truth, we can't. This is good to know.

Asset allocation is a critical part of investing. It doesn't matter if you're a small investor or a big one. You need help with asset allocation. And you can't depend on the pros to give you any help.

If you invest at all, you should read this book and keep it handy. You'll need it to guide you from time to time when you reallocate --- as you should and as you need to.

The book talks mostly in terms of index funds. But it can be used for any sort of investing. It's especially helpful, however, for those who invest in index funds, mutual funds and etf accounts.

The one thing the book seemed to lack was an explanation as to how exactly diversification spreads or, one should say, lessens the risk and how each allocation does so.